"They are absolutely together," one swimming insider told The Daily Telegraph. "There is no doubt they are an item. They are training together under (coach) Michael Bohl and have fallen for one another."
It seems their families approve, with Simpson's younger sister Alli, mother Angie and father Brad all now following McKeon on Instagram.
There have been no reports about how Chalmers' fling with McKeon ended but the Adelaide-based super fish found himself in an extraordinary position this week when Simpson's lifelong dream of making the Aussie team was suddenly placed in his hands.
After a 10-year absence from the sport while he became a global pop icon, Simpson appeared to have booked his ticket to next month's world championships in Budapest in the 100m butterfly.
He finished third with a time of 51.96 at the Australian Swimming Championships but was expected to claim the second spot on the team in the event behind winner Matt Temple because Chalmers, who finished second in the final, wasn't expected to include the event in his busy program.
But that flipped on Thursday night when Chalmers appeared to have a change of heart.
Speaking to Amazon Prime Video after Thursday evening's 50m butterfly final, Chalmers virtually confirmed he would join the Australian team at the world championships, meaning Simpson misses out.
Asked if Simpson had crossed his mind while making the decision. He bluntly replied: "No."
"There's six other guys in the race as well that are disappointed, right? For me, swimming is a cutthroat sport," he continued.
"You've got to finish in the top two to get the individual spot, and unfortunately I — well, not unfortunately, it's my dream. It's my dream to be a butterflier, I started out as a butterflier and I've always hoped to do butterfly.
"My body hasn't allowed me as much to this point, so that's nice, my body's finally going OK. Like I said I want to swim it (the 100m butterfly) in Paris, so I've got to start practising and getting myself ready to do that.
"So for me, it's not come into my mind at all. It comes into my mind like David Morgan for example, he's been on the team for such a long period of time. Does it destroy his dream? It's not something you take into account in an individual sport, unfortunately."
Speaking to reporters after the race, Chalmers explained that he would make a final decision in the next couple of days after consulting his coach.
"Personally I think (going to worlds) is going to be the best thing for me personally moving forward," Chalmers said.
"You can't make me out to be the villain. Yeah, it's unfortunate that it probably takes Cody's spot away but it also takes away five other guys' (places) who were in the race. It's not just Cody.
"I think the hard thing is my training buddy Matt Temple is the Australian record holder who won his back to back title last night. There is no attention or hype around him which is for me what I struggle the most with. It's great there is eyes on me and Cody. The eyes deserve to be on Matt Temple."
Simpson will now have to wait until the end of the week for his selection to be resolved when the team is announced.
"That's a dream come true," he said after Wednesday's race, while initially thinking his spot had been secured.
"I had a great swim this morning, so much progress from last year. I've just been busting my arse all year so it's amazing to see results like this pay off. I was hoping to go a little quicker tonight but to scrape under is a real dream.
"I had no idea it was going to happen this meet so I'm through the roof.
"I only started training a little under two years after 10-11 years out of the water. I didn't think I'd be remotely competitive, racing this year at the earliest. To potentially make a team already is just a bonus on the way to (the) Paris (Olympics)."
